Pincus Selling $228M in Zynga Shares; OMGPOP Got $180M

Zynga shareholders, led by CEO Mark Pincus, are looking to sell 43 million class A shares of the gaming company, three months after it went public.

Bloomberg News

Pincus is cashing in some 16.5 million class B shares, 18% of his count of that class, but just trimming his voting power to 35.9% of all shares from 36.5%. Class B shares carry seven votes for every one class A, but are converted to class A when sold.

If sold at Thursday’s close, Pincus’s proceeds from the sale would be some $228 million.

Along with Pincus, two firms that own 5% stakes are selling too. Institutional Venture Partners, the holder of the third-most shares by voting power, is selling 5.84 million shares and Union Square Ventures, the fourth biggest holder, is selling 5.23 million shares.

Also selling in the offering is SilverLake Partners and Google, both selling just under 4 million shares.

Zynga’s stock is, through Thursday’s close of $13.85, up 39% from its IPO price of $10 on December 15, but were down 1.9% to $13.50 premarket.

The holders are offering 43 million shares with the option for underwriters to go up to 49 million, which would increase the class A shares outstanding by over one third.

The secondary offering are an attempt by the company to stagger what could have been a large flood of shares when the initial lockup periods end for shareholders, a person familiar with the company said.

The original IPO had scheduled for all holders to be locked into shares until late May. The amended filing says non-executive employees holding 115 million shares will be able to sell at the end of April. Executive shareholders selling in this offering are locked up until July and August.

Also disclosed in the filing was that Zynga’s purchase of “Draw Something” creator OMGPOP earlier this week was for $180 million in cash. The company had not commented on the financials, though media reports had put it between $200 million and $250 million.

The six-week old “Draw Something” has shot to the top of the most popular games being downloaded, and Zynga swooped in with its most expensive purchase yet. The company’s filing already added “Draw Something” to its list of best portfolio games in the filing.

UPDATE: An earlier version of this post gave the wrong name to OMGPOP’s “Draw Something.” It also misstated the percent of Pincus’s class B shares being sold in the offering.

Comments (3 of 3)

you are 100 % correct. they charge outrageous amounts for stuff in their games and the games freezes up all the time. this is the new way, get your ipo and than cash in and get out

8:42 am March 23, 2012

Brian Humphrey wrote :

There is a reason Zynga is selling off its stock, they want to get out before it gets ugly.

Zynga games are not what you think they are, the numbers are inflated by 10:1 across the board, because over 50% of the players own several accounts for playing their favorite games. This does not mean that the 50% spend more money, they spend less. They do this because of Zynga's suppressing players from advancing in games they thought to be fun to play. Zynga deliberately makes it difficult in hopes that the player will fork over there hard earned cash, rather than pay their bills.

This has always been the practice of Zynga, their Customer Service is told to make up lies when players call to complain that game is not working properly. What you should ask is for Zynga for the first time in their history to tell the truth, as to why all the games continually have issues do to server issues that run out of CPU and creep to a halt until several days later when they decide they will finally make the games playable again.

If online Poker sites did this to their customers, they would leave instantly, Zynga could care less. They are a gaming site, as many of the games offer Clan/Family environment, and a lot more money exchanges hands than meets the eye.

Zynga as now and as before will lie at all costs, and Facebook really doesn't care one way or the other. Zynga is trying desparately to moves new games away from Facebook, but that will never be successful because its Facebook who really owns what Zynga needs.

Be careful before you invest, this stock will come crashing down, after all its Virtual only, their is no product to back its financial state.

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